The Chicago apartment market is poised for a very good year, thanks to a combination of job growth, maxed-out mortgages, and low construction costs. Local employers are expected to add jobs at a relatively strong rate for the fourth consecutive year—an estimated 40,000 during the year—which in turn will keep demand on the rise. Chicago's large professional and business services sector will lead job growth, accounting for one-quarter of the new positions.
Thanks to a strong local economy and restrained multifamily development, the San Antonio apartment market will be a very stable investment in 2006. Despite its unflattering reputation for excess construction, the San Antonio market offers a different climate than other Texas markets, such as Dallas and Houston: In San Antonio, the core apartment investor will find the market provides a unique combination of stability and yield.
The Windy City's apartment market hasn't blown completely off investors' radar, but it could be awhile yet before Chicago posts any remarkable improvement in its market figures.
While every market has experienced the effects of economic downturn – the national vacancy rate has almost doubled from its low point in 2000 – those with a heavy reliance on technology, telecom, and travel have been hit the hardest. These industries have had the most severe job losses, which results in higher vacancies, rent concessions as managers compete for the remaining pool of renters, and general market softness. The hardest hit markets include Austin, Texas; Seattle; San Jose, Calif.; Portland, Ore.; Denver; Charlotte, N.C.; Orlando, Fla.; and Tampa, Fla. Meanwhile, conditions in more diversified economies, such as Atlanta, Dallas, and Phoenix have suffered from weak demand and oversupply.
Denver's apartment market has been on a rocky path lately, but with fewer vacancies, higher demand, and an economic upturn, this mile-high city's market forecast has just improved.